Alcohol price difference doubles

Estonia’s aggressive excise duty policy has led to a twofold difference in the price of alcohol on different sides of the border between Estonia and Latvia.

Fresh data from the Estonian Institute for Economic Research (EKI) show that while a 0.5-liter bottle of Viru Valge vodka cost €9-11 in Estonian shops in August, it cost just €5.6 in the Alko1000 Store in Latvia. The same bottle costs €14 in Finland - writes

The price difference is even greater regarding a case of Alexander beer that cost just €9 in Latvian shops and €20-22 in Estonian shops in August.

The institute believes the difference in prices will continue to grow and an increasing number of people will go to Latvia for their alcohol in the future.

EKI points to the difference in the retail price of alcohol products as the reason. Additionally, it is entertaining to shop in Latvia. Some people buy from Latvia out of spite, while the media sparks additional interest.

The institute believes the proceeds from alcohol excise duties will fall considerably short of the finance ministry’s forecast this year, even though the ministry has adjusted the latter down by €38 million already.

The deficit promises to be even greater for next year: EKI believes the budget will miss out on €80 million compared to the ministry’s forecast.

For the first time, alcohol excise duty revenue is bigger in Latvia’s state budget than it is in Estonia’s this year, and the trend is forecast to persist, the institute finds.

PR advisor for the ministry Ott Heinapuu said that there is nothing new in the institute’s data, and that their estimate of €80 million is off the mark.

This means the ministry still puts its excise duty revenue forecast at €341 million for 2018. “This includes stockpiles and changes in consumer behavior and border trade. Revenue will grow in 2018 because traders largely sold existing stockpiles subject to lower duties in 2017,” Heinapuu explained.

The ministry admitted it expects alcohol consumption and purchases by Estonians and Finns to fall in Estonia. The ministry believes both groups will buy more from Latvia, and that the total value of purchases will fall in 2018-2020. “Falling alcohol consumption is a long-term trend,” Heinapuu said.

Why has the ministry adjusted its revenue forecast by nearly €40 million this year? Nearly €26 million of it is not directly tied to border trade but is due to stockpiles of goods subject to lower duties from before the hike,” the official explained.

This means that some stockpiling moved to 2016 that cut 2017 revenue so excise duty was paid on earlier stockpiles. Major stockpiles of light alcoholic beverages set aside this summer will mean lower sales volumes for goods subject to a higher duty in 2017. Excluding the effect of stockpiles, excise duty proceeds would grow by 11.5 percent year-over-year in 2017.

Read more Estonian news on our site.
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
2 views in january
I recommend
No recommendations yet


Post your comment to communicate and discuss this article.

Even though education is a matter close to the heart of Estonia 200 leader Kristina Kallas, she cannot imagine herself fighting for the post of education minister: ideas can also be realized by someone else. You just took away Postimees’ editor-in-chief. In your opinion, how is the editorial to feel? Lauri [Hussar] had to give the matter thought, and I presume he did. We talked about why he wants to go into politics. Still, to what extent do you imagine wh...
TALLINN – Russia is seeking integration in Estonia only in words, Kalev Stoicescu, researcher at the International Center for Defense and Security (ICDS) who is running on the ticket of the Estonia 200 party in the March 3 general elections, said on Wednesday commenting on the words said on the subject by Russian Foreign Minister Sergey Lavrov.  "Russia is the only neighboring state which does not wish -- due to its own interests -- progress in integration...
Former top centrist Evelyn Sepp admitted that she donated money the origin of which was unknown to her to the Center Party in 2006. The former politician claimed other members also engaged in the practice but refused to name names. Sepp’s confession on ETV investigative journalism program «Pealtnägija» does not come as a total bombshell. She first said that such covert funding of parties is a widespread practice in the aftermath of the Silvergate scandal i...
"In addition to our ongoing programme of passenger vessel renovations, we are also continuing to upgrade and modernise our cargo vessels to ensure that we continue to develop this important part of our business," he noted, adding that the relocation of the company's Estonia-Finland cargo route to Muuga on the Estonian side in October 2017 and the launch of the Smart Port solution in Tallinn's Old City Harbour in spring 2018 both contributed to improved ser...
During the final week of 2018, a total of 2,524 patients with viral upper respiratory infections sought medical attention, 47.5% of whom were children. A total of 210 cases of influenza were laboratory confirmed, nearly twice as many as during the week before, according to Health Board data. Over the past two weeks, the number of flu cases has quadrupled. The majority of these cases were laboratory confirmed at emergency medical departments, from which pat...
I actually think that B1 is too low of a bar for attaining citizenship. You still can't participate in Estonian society on anything other than a superficial level as noted above, so I'm not sure how you can constitute a "citizen" on that basis. Naturally there has to be a high degree of arbitrariness, and that's precisely the point — whilst B1 level might be sufficient in German or French (I understand that it is the benchmark level when applying for citiz...
Following a white Christmas throughout most of Estonia, Wednesday will see sleet and even rain in parts of the country, and temperatures hovering around the freezing point will means slippery road conditions. Early Wednesday morning, many major highways were salted or wet, but some patches were still icy, the Estonian Road Administration said. Eastern parts of the country will see scattered rain or sleet. Temperatures throughout the day will remain around...
Last weekend, Christmas Eve as well as Christmas Day and Boxing Day still ahead means that most chemist's shops are closed for five days in a row. Tallinners can still get hold of prescription as well as over-the-counter drugs in the 5 Tõnismägi St and 19 Vikerlase St shops. As doctors' practices are closed for the holidays as well, people will have to turn to the emergency room of a nearby hospital in case of any more serious health problems. In Tallinn,...
Irene Ilves, the mother of former President Toomas Hendrik Ilves, died on Tuesday aged 91. Irene Ilves was born on 6 January 1927. An Estonian refugee, she raised her family in New Jersey, on the US East Coast. She is survived by two sons, Andres Eerik and Toomas Hendrik, and four grandchildren, Juulia Kristiine, Luukas Kristjan, Kadri Keiu and Hans Hendrik, Mr Ilves wrote on social media on Wednesday, adding that she will be very missed by family and frie...